All Forum Posts by: Robert Leonard

Well @Austin Davis, that is a kind of wild way to come up with a valuation of a property. The biggest wildcard in your own formula is the NOI. Where did you get it from and what was it as a percentage of gross rents?

With 4-plexes, it is more market specific on the weight given to comps or income.  If you are in a market or submarket (part of town) where there is an abundance of 4-plexes, comps will most likely be given more weight in determining valuation for an appraisal.  If they are scarce, the income approach is probably your best approach to determine value.  Sometimes, an appraiser who does lots of residential appraisals will use comps when they should use the income approach too.  

As an investor, you need to be aware of market values (cap rates, comps), but have a better understanding of investment value (ROI, income & expenses) IMO.

Welcome to BP @Account Closed!

My favorite book recommendation is "The Millionaire Real Estate Investor" by Gary Keller. I follow the net worth model in my REI and you'll find it in that book.

If you join a local REIA and get to know people in the business, you can make friends with people who can really help you put the pieces together and get a good understanding of what's reasonable to expect in your market. You can make some of those connection right here on BP if you use the "Find Members" option under "Network" at the top of this page.

Best of luck to you in your investments!

It's a "big ticket item" that your buyer's inspector will find just like yours did.  How can hoping they don't ask for a replacement backfire on you?  Some inspectors scare the crap out of buyers and they back out instead of making a counteroffer or requesting a replacement.  Then your house goes back on the market and you waste time and some buyers, unaware of your irrational first buyer, will thing something major must be wrong with it. And you could end up getting less than you should.  I would replace it.

@Joe Thib, you are crazy!  Haven't you heard about the headaches? (<--sarcasm) Welcome to the club!  :-P

Congratulations on making your first deal and I wish you much success in accomplishing your goals!  Feel free to reach out any time I might be able to help you!

Welcome to BP @Jamon Stanton!  It's a great place to network and learn.

I understand where you are coming from.  All leverage is not the same.  Even in today's low interest rate environment, it is smart to leave a margin of safety (error) so you can absorb the unexpected or unforeseen.  Leverage is good when used responsibly.  It is a double edged sword, so it must be used with caution. 

The term "make your money when you buy" comes to mind as one of the greatest countermeasures for the risk of using leverage. If my total acquisition cost for a property is 60-70% of the ARV, am I taking the same risk when I finance 100% of that deal as opposed to someone who buys at 80-90% of ARV? Those are very different risks.

Did you search for this topic.  Not saying you are kicking a dead horse, but this is debated/argued/discussed ad nauseam here already.

Given your limiting factors, I would still use leverage and do something else to put my money to work if I couldn't buy another property.

Hello @Mary Beth Groze!  I use http://www.myrental.com/ for their nationwide criminal background and eviction checks as part of my screening process.

Welcome to BP @John Gagliano!  Glad you've joined us here and look forward to getting to know you.

Gary Keller's books are absolutely essential reading for anyone who wants to be an investor IMO!  Let me know if there's ever anything that I might be able to help you or a client?

Hello and welcome to BP @Account Closed!

Glad you found the site.  Hope to see you around here and around Baton Rouge!